Written by Lidia Vijga, co-founder at Stealth Startup
Ever feel like you’re playing a game where everyone knows the rules except you? That’s how I felt when I was building in public. When we started to work on DeckLinks, I was sharing my entrepreneurial journey publicly on LinkedIn, telling everyone about all the ups and downs. But when I decided to join forces with someone and work on our own writing tool, we chose to go stealth mode all the way. To clarify, building in stealth is not about hiding from everyone or going off the grid; it’s actually all about creating an unfair advantage. And that’s why many choose to go startup stealth. Essentially, you are building, innovating, and preparing for battle while your competitors don’t even know you exist.
In this article, I’ll share my firsthand experience and insights on operating in stealth mode while still building the product based on the feedback from the early adopters.
Table of Contents
- What is a Stealth Startup?
- Defining the Stealth Mode Strategy
- Stealth Mode vs Building in Public
- Advantages of Operating in Stealth Mode
- Potential Drawbacks to Consider
- Building Your Stealth Startup Foundation
- Marketing Strategies for Stealth Startups
- Top Startups that Came out of Stealth Mode Successfully
What is a Stealth Startup?
A stealth startup is like that secret project you’ve been working on in your garage but on a much larger scale. It’s a company that operates under the radar, keeping its plans, products, and sometimes even its existence hush-hush from the public and competitors. Typically, these companies provide only a general summary description to maintain confidentiality and manage public perception. As someone who has previously built in public and who’s currently building a startup in stealth mode, I can tell you it’s a completely new exciting experience that has its advantages.
Defining the Stealth Mode Strategy
Stealth mode is a strategic approach where a startup operates discreetly while refining its product or service. This method involves maintaining secrecy about the company’s operations, often for extended periods ranging from several months to years. The goal is to develop and perfect the offering before making it public.
This strategy involves minimal public presence, no marketing, and sometimes even operating under a different name to hide information. So the goal here is to develop your product. Build your team and finally secure funding without tipping off potential competitors or attracting unwanted attention.
Stealth Mode vs Building in Public
As a founder, you’re constantly faced with the choice of how to build your startup. Do you go the stealth route or build in public? While most companies seek visibility, some prefer maintaining secrecy to protect their innovations. Both have their merits, and I’ve experienced both firsthand. Let’s break down the key differences and see how they stack up.
The Secrecy Game
As I already mentioned, stealth mode is all about keeping your cards close to your chest. You’re working behind closed doors, perfecting your product without attracting public attention. This approach lets you focus intensely on your product without external noise or pressure.
On the flip side, it can be isolating. You’re not getting the hype from your friends on social media, nor the potential support from the market.
For me, choosing stealth mode felt like a natural progression. Initially, we created an internal writing tool to support our existing companies. Eventually, we saw its potential and decided to share it with a select group of users, maintaining closed access to keep our competitive edge.
The Open Book Approach
Building in public is the opposite. You’re showing your hand from the start, sharing your journey, your wins, and your losses. It’s like live-streaming your startup journey. This transparency can build a strong community around your product before it even launches. You get instant feedback, which can be incredibly valuable for refining your idea.
However, this openness comes with risks. Your competitors can see what you’re up to, in my case they could see my growth channels and how I do my distribution. Or you might face criticism before your product is fully baked.
Choosing Your Path
The choice between stealth and public building isn’t just about secrecy versus openness. It’s about your goals, your product, and your market. If you’re working on something truly disruptive, stealth might be the way to go. But if you’re in a fast-moving market where feedback is crucial, building in public could be your best bet.
There’s no one-size-fits-all answer. It’s about what works for you and your startup. And sometimes, the best approach is a mix of both – keeping some cards hidden while showing others. Whatever you choose, make sure it aligns with your long-term vision and gives you the best shot at success.
Advantages of Operating in Stealth Mode
Operating in stealth mode isn’t just about shielding your startup from copycats. I’m not worried about others swiping my ideas because 99% of success comes down to execution.
It’s about crafting an environment where you can focus intensely on your product and your vision without the noise of external noise. When you’re in stealth, you control the story. Additionally, it allows you to manage public image effectively, building reputation and generating interest. These are the main reasons why I decided to build my current startup in stealth mode.
Focused Product Development
Without the noise of public opinion, you can concentrate on building your product right. It’s like working on your masterpiece in a quiet studio. You’re not distracted by external pressures or premature feedback. This focus allows you to create something truly innovative and market-ready.
Strategic Partnerships
Stealth mode lets you form key partnerships without alerting the competition. It’s like making alliances in a game of Risk – quietly and strategically. You can approach potential partners or clients discreetly, giving you a chance to secure crucial relationships before your competitors even know you exist.
Control Over Your Narrative
When you’re in stealth, you control the story. It’s like being the author of your own book. When you’re ready to launch, you can craft and present your narrative exactly how you want, without any preconceived notions or misconceptions about your startup floating around.
Flexibility to Pivot
Stealth mode gives you the freedom to change direction without public scrutiny. If your initial idea doesn’t work out, you can pivot without damaging your reputation or alarming investors. This flexibility can be crucial in finding the right product-market fit.
Potential Drawbacks to Consider
One big challenge is not being able to gauge the market’s appetite. Sure, you can run a closed beta and get feedback from early adopters, but without public exposure, you can’t truly measure real interest from your Ideal Customer Profile (ICP).
Fundraising can also be tricky. Many investors want to see traction and public interest before writing a check. Plus, operating in secrecy can make it harder to attract top talent or build industry relationships at scale.
Building Your Stealth Startup Foundation
Building in stealth mode is all about creating a solid foundation that can withstand the challenges of operating under the radar.
Identifying Your Unique Value Proposition
Your unique value proposition (UVP) is your secret weapon. It’s what sets you apart in a crowded market. When my co-founder and I started our stealth startup, we spent weeks refining our UVP. It’s not just about being different; it’s about solving a problem in a way no one else does.
Start by deeply understanding your target market and the current solutions available to them. What pain points are they experiencing? How are they currently solving their problem? How can your solution address these in a novel way? Your UVP should be clear, concise, and compelling. It’s the foundation of your entire business strategy.
Assembling a Trustworthy Team
In stealth mode, your team is everything. You need people who are not just skilled, but also discreet and aligned with your vision. I’ve found that a small, tight-knit team works best in the early stages.
Trust is paramount. Everyone on your team should understand the importance of operating in stealth. I often ask not to share anything product-related on social media, but more importantly, I foster a culture of trust and shared purpose. Your team should feel like they’re part of something special, something worth protecting.
Operating in closed beta
Operating in a closed beta creates a unique bond with your early adopters. They feel like insiders, part of an exclusive group witnessing the product’s evolution firsthand. This special feeling can foster deep loyalty and invaluable feedback, shaping your startup’s future direction.
Securing Initial Funding Without Exposure
Angel investors and early-stage venture capital firms are often open to stealth startups. They understand the need for discretion and may need to disclose funding details while keeping the startup’s specifics confidential. When pitching, focus on your team’s expertise and the market opportunity. Be prepared to share details and any existing traction. Just make sure you let the investors know that you operate in the closed beta.
Marketing Strategies for Stealth Startups
Marketing a stealth startup is a unique challenge. I’m actually going through this with my current startup and here is what I’ve learned so far.
Building Buzz Without Revealing Details
Creating intrigue is an art form. I’ve found that teasing your solution without revealing specifics can be incredibly effective. Start by identifying the problem you’re solving. Make it relatable. Make it urgent.
Use social media to your advantage. Post thought-provoking questions related to your industry. Share insights about the problem you’re tackling. Engage with your audience. But remember, less is more. Every interaction should leave them wanting more.
We actually created a landing page with a waitlist. I think it’s a great way to gauge interest and collect emails. On this landing page, we briefly described what the high-level solution is but we did not get into too much detail. There is a way to use compelling copy that hints at the solution without giving it away. A countdown timer can also add a sense of anticipation.
Leveraging Founder-Led Marketing Approach
As a founder, you’re the face of your startup. Your knowledge and vision are your greatest assets. I’ve learned that sharing my expertise through thought leadership content on LinkedIn can be incredibly powerful. At this point, it’s not about selling; it’s about educating and inspiring while building your audience.
Write those social posts, speak at industry events, or start a your own newsletter or a podcast. Share your insights on the problem you’re solving. This establishes you as an authority in your field. It’s a subtle way to generate interest without revealing too much about your product.
Working with Industry Influencers
I’ve found that offering exclusive early access can be a powerful motivator. Industry influencers love being first. They can help create buzz without you having to reveal too much. It’s a win-win.
Don’t underestimate the power of word-of-mouth. Encourage your team and early adopters to talk about the problem you’re solving. Let the curiosity build naturally. People trust recommendations from those they know.
Preparing for the Startup Launch
The lead-up to your launch is crucial. A well-executed big reveal can generate significant anticipation and excitement. Start dropping more substantial hints. Increase the frequency of your teasers. Build a content calendar that culminates in your reveal.
Host a private event for key stakeholders. This can generate excitement and provide valuable feedback.
When the time comes, make it count. Coordinate your efforts across all channels. Press releases, social media, email campaigns – they should all align. The goal is to create a wave of attention that propels your startup into the spotlight.
Building Personal Connections
Being in stealth doesn’t mean you vanish from the world. It’s perfectly fine to maintain an active social life. Attend industry events, join relevant online communities, and engage in meaningful discussions. Your passion for your startup will naturally shine through, attracting like-minded individuals who can become valuable allies.
The personal connections you make while building in stealth are gold. I always prioritize one-on-one meetings with potential customers, partners, and investors. These conversations offer valuable early feedback without the need for a public launch. They allow you to refine your product and strategy in a controlled, private setting. This focused interaction can shape your product and your startup’s trajectory.
Top Startups that Came out of Stealth Mode Successfully
I’ve seen numerous startups emerge from stealth mode and achieve remarkable success. These companies prove that operating under the radar can lead to groundbreaking innovations and market disruption. By protecting their new technology, these startups were able to safeguard their intellectual property and maintain a competitive edge. Here are the top-of-mind examples that leveraged stealth mode to their advantage.
Stripe
Stripe, a fintech startup that provides payment processing software and APIs for e-commerce websites, was founded in 2010 and operated in stealth mode initially. The company focused on building a robust and scalable payment infrastructure before making a public debut. Stripe’s strategy allowed it to refine its product and secure partnerships with major companies. Today, Stripe is valued at over $95 billion and is considered one of the most successful fintech startups.
Palantir Technologies
Palantir Technologies, a data analytics company, operated in stealth mode for several years before publicly launching. Founded in 2003, Palantir focused on developing software for data integration and analysis, primarily for government agencies and large corporations. The company remained under the radar to protect its proprietary technology and secure high-profile contracts. Palantir’s stealth mode strategy paid off, as it eventually became a major player in the data analytics industry, going public in 2020 with a valuation of over $20 billion.
SpaceX
Founded by Elon Musk in 2002, SpaceX operated in stealth mode for its initial years, focusing on developing its Falcon rockets and Dragon spacecraft. The company aimed to reduce space transportation costs and enable the colonization of Mars. By remaining in stealth mode, SpaceX was able to perfect its technology and secure significant funding without public scrutiny. SpaceX’s successful launches and contracts with NASA eventually brought it into the limelight, establishing it as a leader in the aerospace industry.
Dropbox
Dropbox, a file hosting service, was founded in 2007 and initially operated in stealth mode. The company focused on perfecting its cloud storage and file synchronization technology before launching publicly. Dropbox’s stealth mode allowed it to refine its product and build a robust infrastructure, leading to its rapid adoption and success. Today, Dropbox is a widely used platform with millions of users worldwide.
Magic Leap
Magic Leap, an augmented reality (AR) startup, operated in stealth mode for several years, raising over $1.39 billion in funding before unveiling its product. The company focused on developing a revolutionary AR headset with advanced spatial computing capabilities. Magic Leap’s stealth mode allowed it to protect its intellectual property and generate significant buzz in the tech community. Despite facing challenges post-launch, Magic Leap remains a key player in the AR space.
LinkedIn, the professional networking platform, was founded in 2002 and operated in stealth mode for its initial development phase. The company focused on building a comprehensive platform for professional networking and job searching. By the time LinkedIn launched publicly in 2003, it had a well-developed product that quickly gained traction. Today, LinkedIn is an essential tool for professionals worldwide, with over 700 million members.
